Colorado Health Exchange Workers Paid More Than Similar Positions In Three Other States

One-fifth of the employees of Colorado’s health care exchange made more than $100,000 a year in salary and bonuses — with the executive director’s pay exceeding $190,000 in 2013, exchange records show.

And nearly half of the 36 exchange employees make more than $80,000 a year.

James Sugden, insurance officer and small-business program manager, $125,660

*Bonuses not included

SOURCE: Connect for Health Colorado

The exchange also provides a lucrative retirement plan, contributing as much as 10 percent of an employee’s salary for retirement.

The salaries and retirement benefits for Colorado’s exchange employees are funded primarily with federal tax dollars. The executive director’s pay is higher than that of three similar state exchanges examined by The Denver Post, and also exceeds most of Colorado’s state department heads.

Affordable Care Act opponents say the state has created an unnecessary bureaucracy that is paying excessive salaries.

“This is a bunch of people really responsible for nothing other than getting government grants,” said Linda Gorman, who studies health care policy for the Independence Institute, a free-market think tank.

“These are nice, easy positions from an administration that wanted (the health exchanges) to work.”

Connect for Health Colorado executive director Patty Fontneau is paid $190,549 a year, exchange records show. She received a bonus of $18,500 within nine months of being hired in March 2012. Last fall, Fontneau requested a bonus and raise from the exchange’s board of directors but withdrew it amid criticism that the exchange hadn’t met its enrollment targets.

Richard Betts, who was on the exchange board personnel committee when Fontneau was hired, said her salary and benefits are appropriate for the job.

“We’re going to hire somebody to come and join our team and say there’s going to be a huge target on your back,” he said. “The first thing you’re going to have to do is get a grant to pay the salaries.”

Fontneau defended the salaries for her staff, saying she needs to pay well to attract good people.

“I had to hire individuals with skill sets to implement a significant project in a short period of time,” she said.

The exchange is a nonprofit public entity charged with setting up a healthcare exchange to help people find private insurance and apply for government subsidies if they qualify.

Fontneau leads a staff of three dozen employees, but her salary is $35,000 to $40,000 more than many of the members of the governor’s Cabinet. There are state officials who make more than Fontneau, including education commissioner Robert Hammon, who makes $239,000, and public health director Dr. Lawrence Wolk, who is paid $212,000, but both lead departments with significantly more employees and large budgets.

Fontneau said comparing the health exchange to state agencies is not fair.

“Our enabling legislation sets us up as separate from the state, therefore not under the same state personnel requirements that state agencies have or procurement policies or other state regulations,” she said. “We pay for the skills required in the market to employ people.”

The Post looked at executive pay levels for exchanges in three states with metropolitan areas in which the cost of living is close to Denver’s. Two of those states set up their exchanges through state agencies and pay their staff considerably less.

In Nevada, the executive director makes a maximum $117,000 overseeing a staff of 11 employees. Only one other employee makes more than $100,000.

In Minnesota, the head of the exchange agency makes $136,000, and only 7 percent of the 168 employees make more than $80,000 a year.

In Washington state, which has a nonprofit structure for its exchange similar to Colorado’s, the executive director makes $177,975 a year, and he has a staff of 123 people. The Washington exchange has similar percentages of people who make more than $100,000 and $80,000 as the Colorado exchange.

Colorado exchange staff point out that Colorado has nearly triple the number of people enrolled through the exchange as Nevada and Minnesota. Washington state, which has more people enrolled, has a larger operating budget.

Betts said Colorado residents are getting a good deal.

“We wanted to be pretty lean for staff and outsource as much as possible,” he added.

State Rep. Beth McCann, a Denver Democrat who chairs the Legislative Health Benefit Exchange Implementation Review Committee, said the legislature wanted the exchange to operate like a private entity and that the salaries are appropriate.

The exchange director’s “philosophy is to pay a little more but hire really good people at a higher level of experience to do the management,” she said. “I’m comfortable with the way the exchange is operating.”

But state Sen. Kevin Lundberg, a Berthoud Republican who serves on the implementation committee, questioned why so many people at the exchange make so much money. “I think they’re top-heavy,” he said.

Lundberg said that while leaders in the General Assembly appoint some board members, lawmakers have no say over salaries at the exchange.

Connect for Health Colorado charges a 1.4 percent fee on each policy sold through the exchange. The fee and other revenue sources will begin covering the exchange’s expenses, including salaries, starting next year.

Fontneau said that the exchange’s fee is considerably less than the federal exchange’s fee of 3.5 percent.

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Colorado Health Exchange Workers Paid More Than Similar Positions In Three Other States

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